TIDMCAPD
RNS Number : 1510D
Capital Limited
18 October 2022
For Immediate Release 18 October 2022
Capital Limited
("Capital", the "Group" or the "Company")
Q3 2022 Trading Update
Capital (LSE: CAPD), a leading mining services company, today
provides its Q3 2022 trading update for the period ended 30
September 2022 (the "Period").
THIRD QUARTER (Q3) 2022 KEY METRICS
Q3 2022 Q3 2021 Q2 2022 % change % change
from from
Q3 2021 Q2 2022
-------------------- --------- --------- --------- ---------- ----------
Revenue (US$m) 73.1 61.6 71.2 18.7% 2.7%
-------------------- --------- --------- --------- ---------- ----------
ARPOR*(US$) 182,000 182,000 171,000 0.0% 6.4%
-------------------- --------- --------- --------- ---------- ----------
Average utilised
rigs 91 81 97 12.3% -6.2%
-------------------- --------- --------- --------- ---------- ----------
Fleet Utilisation
(%) 77 76 85 1.3% -9.4%
-------------------- --------- --------- --------- ---------- ----------
Average Fleet 119 107 114 11.2% 4.4%
-------------------- --------- --------- --------- ---------- ----------
Closing fleet
size 127 108 116 17.6% 9.5%
-------------------- --------- --------- --------- ---------- ----------
* Average monthly revenue per operating rig
Financial Highlights
-- Q3 2022 revenue of $73.1 million, up 18.7% on Q3 2021 ($61.6
million) and up 2.7% on Q2 2022 ($71.2 million);
-- Non-drilling revenue contributed 29% of total revenue for Q3
2022, compared with 26% in Q3 2021 and up from 27% in Q2 2022;
-- Average monthly revenue per operating rig ("ARPOR") of
$182,000 was flat on Q3 2021 ($182,000) but up 6.4% on Q2 2022
(US$171,000); and
-- Interim dividend of 1.3 cents per share (cps), paid on 3
October, up 8.3% on 2021 interim dividend (1.2 cps).
Operational Highlights
-- Safety performance remains world-class and improved through
the quarter with the 9-month YTD TRIFR at 1.2, down from 1.8 in H1
2022;
-- Capital Drilling: Strong performance while repositioning the
contract portfolio through the quarter:
- Fleet Utilisation of 77% in Q3 2022 was up 1.3% on Q3 2021 and
down 9.4% on Q2 2022, due to typical seasonal weakness,
particularly the wet season in West Africa, and also increased
asset mobilisation as the group begun repositioning the contract
portfolio as outlined at our H1 22 results. Repositioning of rigs
is continuing in Q4 2022 along with some refurbishments on the
newly acquired rigs at Fekola;
- Previously announced contract wins (6 September):
-- An expanded drilling services contract with B2Gold Corp. at
the Fekola Gold Mine, Mali, out to the end of 2024. Our services on
site now include development (diamond and reverse circulation) and
grade control drilling. To facilitate delivery of the new contract
Capital has purchased 10 rigs from African Mining Services ('AMS'),
part of the Perenti Group.
- New contract wins:
-- A multi-rig exploration drilling contract (including reverse
circulation, diamond and air core drilling) with Perseus Mining at
its Block 14 Gold Project in Sudan; and
-- A reverse circulation drilling contract with Evolution Energy
Minerals at its Chilalo graphite project in Tanzania.
- Rig count increased from 116 to 127 through Q3 2022, net of
depletion (including the 10 rigs purchased from AMS).
-- Capital Mining: Continuing to perform well:
- Sukari Gold Mine (Egypt) waste mining contract achieved a
quarterly record of waste mined since the project began; and
- Capital remains active in the tendering pipeline.
-- MSALABS: Robust growth trajectory continuing:
- Ongoing Chrysos PhotonAssay(TM) rollout:
-- MSALABS now has three Chrysos PhotonAssay(TM) units
commissioned at Bulyanhulu Gold Mine (Tanzania), Morila Gold Mine
(Mali) and Val d'Or (Quebec, Canada) with a fourth unit currently
being commissioned in Yamoussoukro (Cote d'Ivoire);
-- The fifth and sixth units are set to arrive at the Kibali
Gold Mine (DRC) and Prince George (Canada) in the coming weeks. A
further unit is still earmarked for Timmins (Canada), as previously
guided, which will be commissioned in Q1 2023; and
-- Increased geographic spread is enabling accelerated
PhotonAssay trials with major mining houses. PhotonAssay continues
to be in high demand giving MSALABS a strong competitive advantage
especially following the expanded relationship with Chrysos
Corporation to roll out 21 units by 2025.
- MSALABS has been awarded a 3-year mine site laboratory
contract with Shanta Gold at its Singida Gold mine in Tanzania;
and
- MSALABS has completed the construction of a laboratory in
Bougouni, Mali to support gold and lithium operations in southern
Mali along with providing additional sample flow for the Chrysos
unit at the Morila Gold mine (Mali).
Outlook
-- Q3 2022 continued to see robust demand across our blue-chip portfolio of customers;
-- Revenue guidance for 2022 remains $280 to $290 million
(upgraded from $270 - 280 million at the H1 2022 results). Capital
expenditure guidance remains $60-65 million in 2022 (recently
increased from $50-55 million as a result of the purchase of rigs
and other assets from AMS):
- The drilling business has further improved its contract
portfolio with high-quality long-term contracts, and further rigs
will arrive in Q4 with the group's rig count growing towards 130
rigs by the end of 2022;
- The Sukari earth moving contract continues to perform well and at full capacity;
- MSALABS is experiencing strong demand for its laboratory
services with revenue guidance for 2022 remaining $30 million (up
from $15.6 million in 2021). The continued rollout of Chrysos
PhotonAssay(TM) units will drive material further growth through
2023 and 2024; and
- Tendering activity across all business units remains robust,
with a number of opportunities progressing.
Commenting on the trading update, Jamie Boyton, Executive
Chairman, said:
"The third quarter of 2022 saw Capital again increase revenues
despite seeing typical seasonal weakness compounded by increased
asset movement as we repositioned the drilling contract portfolio.
This is testament to the enhancements the business has made in its
service offering over the past two years in particular, and the
more robust and less volatile our revenues have become as a
result.
Through the quarter we begun repositioning our drilling contract
portfolio, not only reducing our exposure to small exploration
contracts but also increasing our exposure to tier-1 assets, as
highlighted with our expanded relationship with B2Gold at Fekola,
and assets with exciting long-term potential as with Perseus
Mining's Block 14 project.
Our mining division continues to perform well with Sukari
achieving a record quarter in waste mined since the project began.
MSALABS also continues its impressive growth trajectory through the
quarter, both through multi-year mine site contracts for its
traditional business and in the roll out of the revolutionary
Chrysos technology."
- ENDS -
For further information, please visit Capital Limited's website
www.capdrill.com or contact:
Capital Limited +230 464 3250
Jamie Boyton, Executive Chairman investor@capdrill.com
Peter Stokes, Chief Executive Officer
Giles Everist, Chief Financial Officer
Conor Rowley, Investor Relations & Corporate Development
Manager
Tamesis Partners LLP +44 20 3882 2868
Charlie Bendon
Richard Greenfield
Stifel Nicolaus Europe Limited +44 20 7710 7600
Ashton Clanfield
Callum Stewart
Rory Blundell
Berenberg +44 20 3207 7800
Matthew Armitt
Jennifer Lee
Detlir Elezi
Buchanan +44 20 7466 5000
Bobby Morse capital@buchanan.uk.com
George Cleary
About Capital Limited
Capital Limited is a leading mining services company providing a
complete range of drilling, mining, maintenance and geochemical
laboratory solutions to customers within the global minerals
industry, focusing on the African markets. The Company's services
include: exploration, delineation and production drilling; load and
haul services; maintenance; and geochemical analysis. The Group's
corporate headquarters are in Mauritius and it has established
operations in Côte d'Ivoire, Canada, Egypt, Guinea, Kenya, Mali,
Mauritania, Nigeria, Saudi Arabia and Tanzania.
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